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Ethereum Classic Hack Causes Coinbase To Suspend ETC Trading

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Ethereum Classic (ETC) may be suffering from what appears to be the first high-level hack of the year after an unknown miner overwhelmed the network with a sudden burst of hashing power.

The apparent hack caused Coinbase to suspend trading in Ethereum Classic tokens today. In a blog post announcing the suspension, the popular wallet and exchange service said it had first detected a “deep chain reorganization” on Saturday; it has now suspended all interaction with the network. Since then,  according to the blog post, “we detected 8 additional reorganizations that included double spends, totaling 88,500 ETC (~$460,000)”

The exchange is currently assessing the cause of the disruption and has not yet stated when it will resume ETC trading services.


A Hack By Another Name…

SIMETRI Research

Coinbase originally said Ethereum Classic was experiencing a 51% attack but retitled the post to “deep chain reorganization” shortly afterward. Stev Lohja, the technology coordinator at ETC Labs’ new core development team, told Crypto Briefing that although the two are fundamentally the same, a “reorg” isn’t so much an attempt to control the network as it is to take temporary advantage of low hash power and double spend before hashing power returns to normal levels.

Lohja suggests that it might have been a failed attempt to double spend ETC on the Bitfinex cryptocurrency exchange. He also said that although there would unlikely be any long-term systemic disadvantages, as the reorg will leave transactions in ‘orphaned’ blocks unconfirmed. “[A] Reorg is a phenomenon in blockchain when a miner mines ahead and the longest chain wins”, Lohja said. “The gap of blocks are orphaned.” 

The official Twitter account for Ethereum Classic has also stated that the recent disruption wasn’t so much a 51% attack as it was “selfish mining”. They have also speculated that the sudden burst in hashing power may have come from a new ASIC mining rig developed by Chinese company Linzhi, which has a hash rate of more than 1,400/Mh.

Others reiterated that the network was under attack, although there is some dispute as to what kind of attack it was and whether funds had been successfully double-spent. Several mining pools have experienced orphaned blocks.

 

A Twitter account linked to the Etherchain block explorer confirmed that an attack was in progress, saying:


 

Although the consequences of the attack are not yet clear, it is unlikely to help what remains of the  Ethereum Classic, which is already on damage control due to a lack of development funds. If a double spend was successful, ETC may well go the way of Bitcoin Gold.

The author is invested in digital assets, but none mentioned in this article.

 

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DISCLOSURE

Authors at Crypto Briefing are invested in cryptocurrencies. The author of this post may be invested in digital assets mentioned here.

Paddy Baker
Paddy Baker
Senior Journalist Paddy Baker is based in London. His interests in global finance and cryptocurrency may seem at odds with his background as a lover of history - but he asserts that understanding the past is the key to understanding the future. Paddy lives a short bike-ride away from ten million other people, and has yet to be seen in public without his laptop.

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